Canada says it will match US tariffs 'dollar for dollar' as trade talks break down

US Tariffs on Canadian Goods Take Effect After Trade Negotiations End

By Nadine Yousif and Toby Mann

A new set of US tariffs on a range of Canadian products began on Saturday after trade negotiations between the two countries ended without an agreement.

Canadian Prime Minister Mark Carney announced the suspension of talks shortly before the Friday deadline and stated that Canada would apply matching tariffs on US goods. He said last-minute changes to the US proposals were unfair and uneconomic and raised doubts about the dependability of any agreement.

Negotiators had been meeting since July following President Donald Trump’s threat to place a 50% tariff on nearly $20 billion of Canadian imports by 19 August. Earlier in the week, Trump had paused the planned tariffs, indicating that the sides were near a deal he described as beneficial for both countries.

Carney stated that while progress had occurred, it fell short of Canadian objectives. He directed negotiators to return to Ottawa. US Trade Representative Jamieson Greer responded that Canada had declined to complete the deal on the terms discussed earlier in the week and had introduced new demands that altered the balance previously reached.

Discussions had included possible reductions in US tariffs on Canadian steel and aluminium from 50% to 25% and on autos from 25% to 15%. In return, Carney had requested that Canadian provinces restore access for US alcohol products. The talks followed more than a year of intermittent negotiations aimed at lowering or removing US tariffs on steel, aluminium, autos and lumber.

The new 50% tariffs, imposed under the Tariff Act of 1930, apply to items including wine, dairy products, cement, clothing and hockey equipment. They add to existing US tariffs already in place on Canadian steel, aluminium, autos and lumber.

The Canadian Chamber of Commerce described the tariffs as damaging to North American competitiveness. Its president, Candace Laing, noted that the measures would affect exporters operating on narrow margins, requiring them to review orders, payroll and staffing.

An analysis by Calgary economist Trevor Tombe estimated that Canada could lose 90,000 jobs if the tariffs remain in place. Financial analysts have projected that the tariffs could reduce Canada’s GDP by between 0.3% and 0.6%.

Ontario Premier Doug Ford expressed support for a reciprocal response. Ontario’s manufacturing and auto sectors have been among those most affected. The economies of Quebec and British Columbia are also expected to face significant exposure.

The United States had sought several changes from Canada, including the removal of remaining retaliatory tariffs on US autos, adjustments to dairy import quotas to increase access for US cheese, and an end to the ban on US alcohol sales imposed by most Canadian provinces in 2025.

The Distilled Spirits Council of the United States stated that the continued exclusion of US spirits products from Canadian store shelves contributed to the outcome. It reported that US exports to Canada fell more than 70% year-over-year from March through December 2025.

A poll conducted by Abacus Data found that 36% of Canadians supported retaliatory tariffs, while 30% preferred that the government continue negotiations. Greer said the United States would not accept counter-tariffs and would respond with further measures.

Both governments attributed the breakdown to actions by the other side. Canadian officials pointed to changes in US terms, while US officials cited new Canadian demands and reversals of prior commitments.